Toronto Mortgage Renewal

The mortgage renewal happens at the end of the mortgage term. For example, in a 5 year mortgage term, after 5 years, the mortgage is said to be renewed. This means that the contract is re negotiated at current market rates. At this time, you can decide to remain with the existing lender or switch lenders. The formal word for switching the mortgage to a different lender is called ‘mortgage transfer’.

What to expect at mortgage renewal time

As your mortgage approaches renewal, your current lender will likely contact you and offer a rate. In most cases, it’s very important NOT to take the first rate the lender offers. It’s very important to shop around, as for a few minutes of time, many thousands of dollars can be saved.

Think about it like this. If shopping for a better mortgage takes 1 hour of time, and this results in $4000 of savings, then this is similar to getting paid $4000 for that hour of work. Even if it takes another 1-2 hours to switch lenders, the investment of time can be well worth it.

If you’re not interested in switching lenders, shopping around can give you a tool to help negotiate with your current lender owner.

So, in summary, working with your existing lender AND shopping around are the most important points during renewal time.

How to negotiate the best mortgage renewal terms

To negotiate the best mortgage terms in Toronto, it’s important to contact your existing lender and ask them for their best rate. It’s important to let the existing lender know that you are shopping around and to let you know their best rate now. Not in a month or two, but within the next day or two. 

This gives the existing lender a good opportunity to retain your business, and if they are ready to come to the table with a competitive offer, this could help you save thousands on your renewal.

Shopping with Altrua Financial will also lead to the most competitive Toronto mortgage renewal rates.

You will be able to compare the best rates, terms, and service levels and make your decision from there.

Ultimately, it’s important to not take the lender’s first offer. By ‘pushing against the walls’ just a bit, this can lead to some of the easiest and most significant savings possible.

How is a mortgage renewal different than a refinance?

During a mortgage renewal, there is no change to the mortgage other than the rate and payment. The mortgage amortization remains the same. There is no ability to increase the mortgage amount to consolidate debt or for home upgrades, for example. There is no ability to reduce the payment in case rates are higher and some payment relief is needed.

A mortgage refinance, on the other hand, is essentially a new mortgage. This new mortgage pays out the existing mortgage, It is not a continuation of the the existing mortgage as is seen in a mortgage renewal. 

When a new mortgage is selected, any lender and mortgage options can be selected. This includes the mortgage size (it can be bigger to consolidate debt) or the amortization can be longer to minimize payments. Or several other options when selecting a new mortgage, So there is more flexibility with a mortage refinance,

Mortgage renewal process

The mortgage renewal process typically happens in 5 simple steps:

  1. Contact existing lender to see what their best rate is.
  2. Connect with Altrua Financial to see how we can compare.
  3. If Altrua offers a better deal, send in the application and supporting documents,
  4. Review the approval, discuss any questions and sign when ready.
  5. The mortgage is closed by a legal service, typically at no cost.

Indeed, not only should there be no ‘cost to transfer your mortgage, there should be thousands in savings.